Economic Suicides Spurred by a Dead Currency
Boy, you can’t help but feel for ordinary European citizens who, by no wrongdoing of their own, are being subjected to such upheaval in their lives that the term “economic suicide” has been coined for people who choose to end those lives prematurely in response.
All the while, policymakers are about to enter their fourth year of dithering, refusing to allow debt to be written off and, instead, subjecting a whole continent to more of what they’ve delivered since late-2009 for what is increasingly understood to be a currency that is now “dead” in most senses of the word.
These points are driven home today in these two excellent reports:
- ‘Economic suicides’ shake Europe as financial crisis takes toll on mental health – Washington Post
- When will the euro collapse? It’s already dead – MarketWatch
In the first, a few of the thousands of economic suicides that have occurred in Greece are detailed:
Antonis Perris, a musician unemployed for more than two years, was desperate. Perris wrote in an online forum late one night that he had run out of money to buy food and cursed those responsible for the economic crisis in Greece. “I have no solution in front of me,” he typed.
The next morning, Perris took the hand of his ailing 90-year-old mother. They climbed to the roof of their apartment building and leapt to their death.
The double suicide, in a working-class neighborhood in the Greek capital in late May, is just one incident among thousands of suicides this year that have shaken European societies as mounting job losses, cutbacks in public services and shrinking government pensions due to the continent’s financial upheaval take a toll on mental health.
If this were bankers jumping out of windows instead of ordinary people taking their lives, it surely wouldn’t be so bothersome, but, it’s not and when considering how the common currency has already lost many of the qualities that make it a currency as recounted by Matthew Lynn in the second article, it all seems so pointless.
The euro could stagger on from crisis summit to emergency bailout for another decade. Then again, it could be gone by the end of the month — if Greece is refused its third bailout, the country may be kicked out, and the entire currency could unravel over the course of a few chaotic days.
In reality, whether it is a few months or a decade away does not make as much difference as you might suppose.
Why not? Because in most of the ways that actually matter, the euro is already dead.
It no longer meets most of the criteria of a working form of money. There is an important point in that for investors. It is right now — while the currency no longer lives but still staggers on like a zombie — that the euro is wreaking most havoc on the countries of Europe. Once it is finally taken apart, markets in those nations can start to recover — potentially very rapidly.
They really should just get on with it. Kick Greece out of the eurozone or let Germany take northern European countries and form a northern currency block so that a southern euro can depreciate by about 50 percent and at least the Greek tourism industry can get a little boost. As it is, this is just “death by a thousand cuts” that, unfortunately, will probably go on for years.